UC 267 
.U6 
1919 
Copy 2 



DECISION 

OF THE 

WAR DEPARTMENT 
BOARD OF CONTRACT ADJUSTMENT 

t 
IN THE 

ACETATE OF LIME CASES 



V 



July 31, 1919 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1919 



0. of $• 
AUG 20 1919 



1 



'1 



■ 






CETATE OF LIME CASES. 



BEFORE THE BOARD OF CONTRACT ADJUSTMENT OF THE WAR 

DEPARTMENT. 

In the matter of claims for acetate of lime and Mgs of — 



Name. 



Address. 



Number. 



Barclay Chemical Co 

John Bartley 

Beerston Acetate Co 

Thos. Berry Chemical Co 

Boyne City Chemical Co 

Buckhannon Chemical Co 

Cadillac Chemical Co 

Charcoal Iron Co. of America. 
Clawson Chemical Co 

Corbett & Stewart 



Coryville Chemical Co 

Crossley Chemical Co 

Cumner- Biggins Co 

Custer City Chemical Co 

Day Chemical Co." 

Duck Harbor Lumber & Chemical Co. 

East Jordan Chemical Co 

Forest Chemical Co 

Forest Products Chemical Co 

Gaflney Wood Products Co 

Genesee Chemical Co 

Gray Chemical Co 

Heinemann Chemical Co 

James Manufacturing Co 

Keeler Chemical Co 

Keystone Wood Products Co 

Kinzua Valley Chemical Co 

Lackawanna Chemical Co 

Lamont Chemical Co 

Arthur Leighton Co 

Lewis Run Manufacturing Co 

Liberty Wood Products Co 

Luzerne Chemical Co 

Me Keen Chemical Co 

Maplewood Chemical Co 

Marvindale Chemical Co 

Maryland Wood Products Co 

Milanville Chemical Co 

Merritt Chemical Co 

Minard Run Chemical Co 

Nanson Chemical Co 

Newton Chemical Co 

Nordmont Chemical Co 

Nusbaum Chemical Co 

Olean Chemical Co 

Oswavo Chemical Co 

Otto Chemical Co 

C. W. Peak 

Penn Chemical Co 

E . D. Pen warden 

Riefler & Sons (Inc.) 

Ridey Lumber Co 

Russell Chemical Co 

Smethpoi t Wood Products Co 

Sullivan Chen ical Co 

Susquehanna Chemical Co 

Tionesta Valley Chemical Co 

Geo. I. Treyz 

G. H. Treyz & Co 

Tyler-Hall Chemical Co 

Vandalia Chemical Co 

Wisconsin Chemical Co 

Wright Chemical Co 

Wyman Chemical Co 



Williamsport, Pa... 
Mount Alton, Pa... 

Beerston, N. Y 

Detroit, Mich 

Boyne City, Mich.. 

Olean, N. Y 

Cadillac, Mich 

Detroit, Mich 

Ridgway, Pa 

Binghamton, N. Y. 

Bradford, Pa 

Starrueca, Pa 

Cadillac, M,jch 

Custer City, Pa 

Westline, Pa 

Lookout, Pa 

East Jordan, Mich. 

Sheffield, Pa 

Memphis, Term 

Bradford, Pa 

Genessee, Pa 

Roulette, Pa 

Olean, N. Y 

Kane, Pa 

Wetmore, Pa 

Olean, N. Y 

Williamsport, Pa... 

Olean, N. Y 

Kane, Pa 

Cook Falls, N. Y. . . 

Bradford, Pa 

Port Allegany, Pa.. 

Pittston, Pa 

Williamsport, Pa... 
Shinhopple, N. Y.. 

Bradford, Pa 

Maryland, N. Y 

Binghamton, N. Y. 
Shavertown, N. Y.. 

DeGolia, Pa 

Bradford, Pa 

Olean, N. Y 

PittJton. Pa 

Bradford, Pa 

Kragon, N. Y 

Coneville, Pa 

Williimsport, Pa... 
Peakville, N.Y.... 

Ridgway, Pa 

Car ley Brook, Pa.... 

Honewdale, Pa 

Walton, N. Y 

Russell, Pa 

Olean, N. Y 

Acidalia, N. Y 

Olean, N. Y 

....do 

Cooks Falls, N. Y.. 
Binghamton, N. Y.. 

Hancock, N.'Y 

Olean, N. Y 

Phelps, Wi; 

Ridgway, Pa 

Port Allegany, Pa... 



95 
96 

186 

187 

97 



100 
103, 104, 
105, 106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
125 
126 
127 
128 
129 
130 
131 
190 
132 
133 
136 
134 
159 
135 
137 
138 
160 
191 
139 
140 
162 
141 
142 
143 
161 
144 
145 
146 
147 
148 
149 
150 
152 
153 
151 
154 
155 
156 
157 



130005—19 



4 ACETATE OF LIME CASES. 

Findings or Fact. 

The Board finds the following to be the facts : 

1. The above-enumerated claimants have filed their statements 
of claim, Form B, under the act of Congress approved March 2, 
1919, entitled "An act to provide relief in cases of contracts con- 
nected wjth the prosecution of the war, and for other purposes," 
asking to be reimbursed for acetate of lime and bags containing 
same, on their hands on December 14, 1918. The circumstances 
upon which their claims are based are as follows : 

2. On or about June 24, 1918, each claimant received an order, 
hereinafter designated as " compulsory order 326 B/C," of -which 
the following is a copy: 

" Pursuant to the authority of section 120 of the act of Congress 
approved June 3, 1916 (39 Stat., '213) entitled "An act for making 
further and more effectual provisions for the national defense and 
for other purposes," and acting under the direction of the President 
of the United States, Commander in Chief of the Army and Navy, 
an order is hereby placed with you, for purposes connected with the 
national security and defense, for the entire output of acetate of 
lime, wood alcohol, actetone and or ketone, which your plant or 
plants are capable of producing from July first, nineteen hundred 
eighteen, until December thirty-first, nineteen hundred eighteen 
(both dates inclusive), the said products or material being of the 
nature and kind usually produced or capable of being produced by 

" The War Industries Board through its representative herein 
designated, C. H. Conner, Wood Chemical Section, or any other 
representative which it may in future designate, is hereby authorized 
and empowered to accept delivery of said products or material: to 
take possession or to direct delivery thereof for the purposes men- 
tioned above, by waiver or otherwise and upon such terms and con- 
ditions as it may deem necessary; and to make returns to the Di- 
rector of Purchases, Storage, and Traffic, Washington, D. C, of all 
things done and proceedings had in connection therewith. 

"Approved by Chemicals Division, War Industries Board. 

"By Charles H. MacDowell. 

"Approved by the Office of the Judge Advocate General. 

"By L. W, Call, Lt. Col. J. A. N. A. 

"Approved bv Priorities Committee War Industries Board, 
6/12McK. 

" By Edwin B. Parker. 

" This order will take precedence over all other orders and con- 
tracts heretofore placed with you by any person whatsoever other 
than prior orders by the War Department, the Xavy Department, 
or the Shipping Board. You are further notified that bv the said 
act of June 3, 1916, any refusal on your part to give to the United 
States such preference in the matter of execution of this order, or 
any refusal on your part to furnish the above products or materials 
at a reasonable price, as determined by the Secretary of War, is 



ACETATE OF LIME CASES. 5 

made a felony and punishable by imprisonment for not more than 
three years and by a fine not exceeding $50,000. 

"Done at the City of Washington this fourteenth (14th) day of 
June, 1918. 

" By direction of the Secretary of War : 

" Hugh S. Johnson, 
" Brigadier General, N. A. for the. 
" Director of Purchase, Storage and Traffic. 

Claimants allege that all of the conditions of said compulsory 
order 326 B/C were " entered into " in good faith ; that claimants' 
plants were operated wholly for the purpose of producing the 
materials designated in said order during the period from July 1, 
1918, until 7 o'clock p. m. December 14, 1918, both dates inclusive, 
when said order was terminated by the receipt by each claimant of a 
telegram from the Director of Purchase, Storage, and Traffic, read- 
ing as follows : 

" Compulsory order number three hundred twenty-six, dated June 
fourteenth, nineteen eighteen, for acetate of lime, wood alcohol, ace- 
tone and or ketone, is hereby terminated to take effect seven p. m., 
December fourteenth, nineteen eighteen, and further performance 
of this order shall cease at that date and hour. Done at the City of 
Washington, D. C, this fourteenth day of December, nineteen 
eighteen. By direction of the Secretary of War." 

3. The price to be paid by the United States for the property re- 
quired by the foregoing compulsory order 326 B/C was fixed by the 
War Department Board of Appraisers in a notice issued by them 
on or about June 24, 1918, reading'as follows : 

" By direction of the Secretary of War, the War Department 
Board of Appraisers has considered the price to be paid by the 
United States for the property required by the foregoing compul- 
sory order (the information collected by the appropriate division of 
the War Industries Board and the department or corps in which the 
said order originates, having been submitted to us), and we have 
determined that four cents ($0.04) per pound for acetate of lime 
(on the basis of 80 per cent acetate of lime by distillation test), 
twenty-five and one-half cents ($0.25-|) per pound for acetone, 
twenty-five and one-half cents ($0.25^)' per pound for ethyl methyl 
ketone, fifty cents ($0.50) per gallon for crude wood alcohol 82 de- 
grees tralles, seventy-nine cents ($0.79) per gallon for denaturing 
grade wood alcohol, seventy-nine cents ($0.79) per gallon for 95 per 
cent refined wood alcohol, eighty-two cents ($0.82) per gallon for 
97 per cent refined wood alcohol, eighty-six cents ($0.86) per gallon 
for pure methyl alcohol, and eighty-six cents ($0.86) per gallon for 
methyl acetone, are reasonable prices, and have made a preliminary 
award upon such basis as just compensation for the required prop- 
erty, when provided for and accepted by the United States. 

" Notice is hereby given that unless dissent to this price, as un- 
reasonable, is filed with this board within 15 days from the date of 
mailing this notice, by the person, firm, or corporation addressed 
therein, it shall be conclusively presumed that hearing thereon is 



6 ACETATE OF LIME CASES. 

waived and this board will make a final award upon the terms herein 
stated unless, upon due notice, it is otherwise ordered. If notice of 
dissent to the price herein stated as reasonable is filed, as above pro- 
vided, the performance of the order is not thereby suspended, but a 
hearing upon the reasonableness of the price will be afforded upon 
due notice to you of time and place, and the award of this board 
made thereafter will be final." 

4. The terms and conditions of payment agreed upon by the War 
Industries Board through its representative, C. H. Conner, Wood 
Chemical Section, in a letter addressed to said claimants dated July 
23, 1918, were as follows: 

" TERMS AND CONDITIONS. 

" Payment for acetate of lime is to be made in cash subject to 
examination of goods at destination. 

' l Bags are to be returned within GO days as per shipping instruc- 
tions in good condition, or if not so returned to be paid for by the 
consignee. 

" General trade conditions and terms will remain the same as at 
the present time. 

" Claims for shortage, poor quality, and damage in transit on any 
crude or refined products will be matters for adjustment between 
the consignor and consignee. 

" In order to facilitate the securing of waivers covering the dis- 
tribution of acetate of lime covered by said compulsory order the 
War Industries Board will permit such distribution through Wil- 
liam S. Gray & Co., New York, without securing individual waivers 
from the producer on condition that William S. Gray & Co., for the 
purposes of such transactions, shall be deemed the agent of the pro- 
ducer, with the same obligations in regard to delivery of acetate of 
lime so distributed as devolve upon the producer by reason of said 
compulsory order and with authority to make requests for shipment 
and to waive in the name of William S. Gray & Co. any and all 
claims of the producer against the United States of America 
and/or its representatives by reason of the placing of a compulsory 
order for the product involved." 

5. Each claimant has filed with the board a statement showing 
the number of pounds of acetate of lime on hand; the price to be 
paid under the aforesaid notice issued by the War Department 
Board of Appraisers; the number of bags, and the value of each; 
and each claimant has, in its statement of claim, averred that it has 
not received payment for the property, and requests the Secretary 

.of War to pay the said claim upon the basis fixed by the War De- 
partment Board of Appraisers and the War Industries Board, Wood 
Chemical Section. 

6. It will be noted that the aforesaid compulsory order 326 B/C 
was placed for purposes connected with the national security and 
defense for the entire output of the different claimants, not only of 
acetate of lime, but also of wood alcohol, acetone and ketone which 



ACETATE OF LIME CASES. 7 

the said plants were capable of producing from July 1, 1918, until 
December 31, 1918, both dates inclusive, but no claims have been filed 
before this board for wood alcohol. 

7. The Government's fixed price was automatically destroyed by 
the cancellation order, and some of the chemicals, to wit, acetate of 
lime, acetone and ketone, have decreased in value, and for those 
which have decreased in value, claims have been presented, but no 
claim has been made for alcohol, which immediately increased in 
price. The above-named claimants are not alcohol refiners, but are 
manufacturers of crude alcohol and acetate of lime simultaneously, 
and have shipped all of their crude alcohol manufactured up to 
December 14, 1918, to the various refiners as was their custom dur- 
ing the period named in the compulsory order, and have presented 
their claims to this board for the acetate of lime on hand as of 
December 14, 1918. The chemical auditor for this board, Mr. John 
Hartnett, jr., has collected the records of the War Industries Board 
bearing on the question of the number of pounds of acetate of lime 
on hand with each of the aforesaid claimants as of December 14, 
1918, and from the records now in the possession of the Board of 
Contract Adjustment, ascertains that the following table shows the 
number of bags and number of pounds of acetate of lime on hand 
with each claimant. Some of the claimants have since December 
14, 1918, shipped acetate of lime on hand on that date to the Mel- 
ville-Corbett Co. and to the Albany Chemical Co., but for reasons 
hereinafter set out, these various amounts have been credited by us 
to the concern shipping and deducted from the concern receiving the 
shipment. The table is as follows : 



Address. 




War 

Industries 

Board. 



Barclay Chemical Co 

John Bartley 

Beerston Acetate Co 

Thos. Berry Chemical Co 

Boyne City Chemical Co 

Buckhannon Chemical Co 

Cadillac Chemical Co 

Charcoal Iron Co. of America 

Clawson Chemical Co 

Corbett & Ptewart 

Cory ville Chemical Co 

Crosslcy Chemical Co 

Cumner-Diggins Co 

Custer City Chemical Co 

Pay Chemical Co 

"Duck Harbor Lumber & Chemical Co 

East Jordan Chemical Co 

Forest Chemical Co 

Forest Products Chemical Co 

Gaffney Wood Products Co 

Genesee Chemical Co 

Gray Chemical Co 

Heinemann Chemical Co 

James Manufacturing Co 

Keeler Chemical Co 

Keystone Wood Products Co 

Kihzua Valley Chemical Co 

Lackawanna Chemical Co 



Williamsport, Pa . . 
Mount Alton, Pa. . . 

Beerston, N. Y 

Detroit, Mich 

Bovne City, Mich.. 

Olean, N. Y 

Cadillac, Mich 

Detroit, Mich 

Ridgway, Pa 

Binghamton, N. Y. 

Bradford, Pa 

Starrucca, Pa 

Cadillac, Mich 

Custer City, Pa 

Westline, Pa 

Lookout, Pa 

Fast Jordan, Mich. 

Sheffield, Pa 

Memphis, Tenn 

Bradford, Pa 

Genesee, Pa 

Roulette. Pa 

Olean, N . Y 

Kane, Pa 

Wetmore, Pa 

Olean, N. Y 

Williamsport, Pa... 
Olean, N. Y 



2, 114 
121 
330 
789 

3,254 
940 

3,447 

11,568 

769 

1,995 
704 



1, 475 
881 
980 
443 

1,246 
31 

3,243 

1,294 
882 

1,978 
507 
289 
325 

1,142 

1,192 
813 



$292, 961 

20, 471 

47, 436 

107, 897 

486, 980 

131, 630 

258, 812 

1,513,341 

105, 530 

299.438 

101^460 

35, 291 

210, 925 

120, 021 

156,443 

60,361 

169, 900 

4,687 

504, 806 

187,535 

131,531 

278, 767 

70, 923 

40, 171 

48,750 

171, 273 

103, 000 

116, 696 



ACETATE OF LIME CASES. 



Firm. 


Address. 


Bags. 


War 

Industries 

Board. 






225 
506 

1,218 
405 

1,527 

2, 045 
279 
837 
453 
343 
206 
561 
390 
708 
461 
284 
336 
465 
637 
233 
65 
195 
300 
539 
112 
317 
368 
525 

2,008 
240 
814 
564 
218 

1,402 
488 
880 


$31,275 




Cooks Falls, N. Y 


175, 893 






123, 785 






56,700 




Pittston, Pa. 


229, 074 






224, 840 




Shinhopple, N. Y 


39, 850 






121,184 






70, 168 






51,400 






30, 979 






86,011 






56, 435 




Olean, N. Y 


84,349 




Pittston Pa 


69, 221 






41, 750 






45, 066 






82,029 


Otto Chemical Co.... 




41,500 


C. W. Peak.. .. 


Peakville, N. Y 


35,000 


Penn Chemical Co 




10, 345 






25, 350 






40, 500 


Risley Lumber Co 


Walton, N. Y 


87,323 


Russell Chemical Co 




15,112 




Olean, N. Y 


45, 648 


Sullivan Chemical Co 


Acidalia, N. Y 


61,058 




Olean, N. Y 


75,075 


Tionesta Valley Chemical Co 


Olean, N. Y 


303, 758 


Geo. I. Treyz." 


Cooks Falls, N. Y 


36, 660 


G. H. Trevz & Co 




134, 465 


Tyler-Hall Chemical Co 




79,464 


Vandalia Chemical Co 


Olean, N. Y 


32,512 


Wisconsin Chemical Co 




195, 277 


Wright Chemical Co 




73, 306 


Wyman Chemical Co 




122, 139 









8. Claims of the refiners for acetate of lime and bags do not ap- 
pear in this opinion, and some crude manufacturers have been 
omitted for later verification of the amounts on hand. 

9. In respect to bags containing the acetate of lime, claimants 
differ in the price requested to be assumed by the Government. 
Some have put in claims for 16 cents each, some for 20 cents each, 
some for 25 cents each and others for 35 cents each. This matter is 
called to the attention of the Bureau of Aircraft Production to 
whom this case will be referred, in order that that bureau may be 
apprised of the difference in the claims. It is to be noted, of course, 
that the bags are a part of the Government's property, and in set- 
tlement this should be taken into account. 

Decision. 



1. The action of the President in placing with the various com- 
panies the compulsory orders for their entire output, was based 
upon section 120 of the act of Congress approved June 30, 1916 (39 
Stat., 213). Under the terms of said compulsory orders the War 
Industries Board was authorized and empowered to accept delivery 
of said products or material, to take possession of or to direct de- 
livery thereof for the purposes of national security and defense by 



ACETATE OF LIME CASES. 9 

waiver or otherwise, and upon such terms and conditions as it 
might deem necessary. 

2. We are of the opinion that the Government is obligated to 
take and pay for these products at the prices fixed by the War De- 
partment Board of Appraisers, and that settlement should be made 
therefor as of the time of the termination of the compulsory order, 
to wit, 7 o'clock p. m., December 14, 1918. The proper disposition 
of this property belonging to the Government, so as to recoup for 
the Government the largest amount possible, is a question worthy 
of serious consideration by the representatives of the Government. 
An expert for the E. I. DuPont de Nemours Co., in testifying be- 
fore the board, gave as his opinion that the price of acetate of lime 
would, in the near future, appreciate considerably, and before any 
disposition of the property by the Government it is recommended 
that said expert, Mr. Charles T. Clark, of Bay City, Mich., be con- 
sulted. 

3. The right of the Government to recoupment on account of the 
increase in the value of alcohol will be considered in the cases in 
which the refiners, to whom the alcohol has been shipped by the 
producers, are asking to be reimbursed for acetate of lime. 

4. As before indicated in this opinion, the claims for the bags 
vary in the different cases, but the board is of the opinion that the 
different claimants should be compensated for said bags at the 
actual price paid by each claimant. 

DISPOSITION. 

1. The Board of Contract Adjustment hereby transmits its deci- 
sion to the Claims Board, Air Service, Washington, D. C, for 
recommendation to the Secretary of War of a fair and equitable 
basis upon which the agreements should be adjusted, paid, or dis- 
charged, and for further procedure in the manner provided in sub- 
section (c), section 5, Supply Circular IT, Purchase, Storage, and 
Traffic, General Staff, as revised March 26, 1919. 

Board or Contract Adjustment, 
By Christopher B. Garnett, 

Chairman, Colonel, U. S. A. 



We concur 



F. C. Boggs, 

Colonel, General /Staff. 
Robert H. Carruth, 

Lieutenant Colonel, F. A., U. S. A. 
Joseph Fairbanks, 

Lieutenant Colonel, J. A., U.S.A. 
Edward S. Malone, 

Lieutenant Colonel, U. S. A. 
Edgar A. Hamilton, 
Lieutenant Colonel, Orel. Dept., U. S. A. 



10 ACETATE OF LIME CASES. 

A true copy : 

In testimony whereof I have hereunto set my hand and affixed the 
seal of the Board of Contract Adjustment at Washington, D. C, 
this — - day of , 1919. 



Attest 



WlLLARD A. DOERR, 

Recorder, Major, F. A., U. S. A. 



Christopher B. Garnett, 

Chairman, Colonel, U. S. A, 



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